The Pakistan government today approved the transfer of the management of the strategic Gwadar deep sea port from Singapore to China, a move that could raise concerns in India.
A meeting of the cabinet chaired by Prime Minister Raja Pervez Ashraf gave its permission for transferring the concession agreement for Gwadar from the Port of Singapore Authority to China Overseas Port Holdings Limited, Information Minister Qamar Zaman Kaira said.
The Chinese developer had played a key role in the construction of the facility in the Arabian Sea.
"The cabinet today gave approval to transfer the operation of Gwadar port from Port of Singapore to China Overseas Port Holdings Limited," Kaira told a news conference.
"Both the companies have settled their deal," he said, without giving a timetable for the transfer.
He said the concession agreement and related government notification would be amended accordingly.
China provided about 75 per cent of the initial funding of USD 250 million for building the strategic port in the southwestern province of Baluchistan.
It is currently being operated by Singapore's PSA International but needs further development to become fully operational. Kaira said PSA International could not develop or operate Gwadar "as desired".
The Chinese will make "more investment" to make the port operational, he said.
Kaira hoped the port would soon contribute to Pakistan's economy under the new management.
Earlier this month, PSA International had indicated that it would withdraw from its contract to manage and develop Gwadar port for a period of 40 years.
China, which is Pakistan's closest ally, had for long been a front-runner for taking over the port.
China recently said it would construct another 20 berths at Gwadar if it was given the rights to operate the port.
Beijing has been working to develop a string of harbours in the Indian Ocean and Arabian Sea, a region traditionally considered an Indian backyard.
China has funded ports in Sri Lanka and has been approached to help build a port in Bangladesh.
Pakistan's former defence minister Chaudhry Ahmad Mukhtar had said in 2011 that Islamabad would be "grateful" to the Chinese government if naval base was built at Gwadar.